Cynical Tax Proposal (2008 Sep)

by Barry A. Liebling

In his campaign for the presidency the Democratic nominee Barack Obama has promised to raise taxes on Americans with the very highest incomes while making taxes somewhat lower for most Americans. On cue enthusiasts from both major parties jumped in to praise or condemn the proposal. Democrats describe Obama’s position as intrinsically appealing and a key component for fixing a faltering economy, while Republicans decry it as another tax hike that will damage the economy, is unfair to successful Americans, and should be unattractive to voters.

The power of the Obama tax proposal is its potential for galvanizing voters into supporting the Democratic candidate. And from a psychological perspective the proposal is both shrewd and cynical – shrewd because it taps into strong yearnings that are held by many voters; cynical because the yearnings are the desire to freeload, to base public policy on envy, and to meddle with the lives of others.

Consider how the proposal is likely to strike a freeloader – a man or woman who looks for opportunities to sponge off of the efforts of others. Bear in mind that the Democratic candidate is advocating an activist government that gets involved in more areas and does more for people – and to people – than previously. He intends to expand the government both by enhancing funding of existing programs and by initiating new ones.

If this comes to pass it will certainly be expensive, which means more taxes will have to be collected to pay for it. But the Obama proposal explicitly says that most people – that means you – will have their taxes reduced. The incremental burden will fall on those with the highest incomes – not you. This should resonate strongly to those who want something for nothing – and want an authority to reassure them that their desire is not shameful but is part of a legitimate political process.

How does the new tax proposal pander to those who are consumed with envy? For as long as there have been politicians the worst of them have exploited class warfare. And today the class that is easiest to attack with impunity – where it is socially acceptable to express hostile aggression – is “the rich.” The theme of the habitually covetous is that people who make the most money ought to be cut down to size and have their comeuppance. This is part of what motivated the institution of progressive taxation in the first place. Even though people with the largest incomes are already taxed at the highest rates, the Obama proposal promises to turn up the volume. The anticipation of sticking it to the rich, giving them a rap on the knuckles, can be tantalizing to jealous voters. Note that the envious voter rationalizes increased takings by stating that even after a punitive tax, top earners still have more money than you do – which keeps the door open for raising their taxes again.

Parenthetically, the envious often assert that the rich do not deserve their wealth because they might have acquired it dishonorably. Covetous people regard heavy taxation on big paychecks as justice. The truth is that people who make money honestly – whether it is a lot or a little – have a right to keep all of it. Those who obtain money unethically – by the use of force or fraud – deserve to keep none of it.

And what appeal does the Obama tax proposal have for meddlers? It is an open invitation to those who are obsessed with income redistribution.

A popular mantra of welfare-state enthusiasts is that the government should continuously take steps to reduce inequality of results. If some people have more money than others – regardless of how this comes to pass – it is proper to use government force to redistribute the wealth. It is significant that on the Obama website (www.BarackObama.com) the tax proposal is described as “restoring fairness” which is a code for confiscating more take-home pay of the most successful earners and transferring it to those who “need it more” – politically favored protected groups and programs ostensibly set up to serve them.

Of course the Republican critics of the Obama tax proposal will have a difficult time challenging the “restoring fairness” rationale. Conservatives generally do not question the policy of having a progressive income tax – the more you make the higher your tax rate. They mostly accept the idea of income redistribution but regard further increases on the rich as going too far. The quarrel between the two major political parties is more about degree than about principle.

The political effectiveness of the Obama tax proposal – the extent to which it will be persuasive to voters – remains to be seen. There is no question, however, that it is playing to reprehensible motives and deserves to be rejected.

*** See other entries at AlertMindPublishing.com in “Monthly Columns.” ***

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